With 49 states currently in or at risk for a recession and the economic crisis reaching a breaking point, Miami University is feeling the strain.
Miami announced Tuesday a projected $22 million budget shortfall for the 2010 fiscal year, which will result in a $16 million cut across divisions.
Miami President David Hodge said financial aid funds would not be affected by the cuts. According to Hodge’s Dec. 9 letter to the university community, the university’s general budget of $347 million was reduced to $280 million to account for money in the budget the university won’t touch-including $67 million dedicated to student scholarship and aid and bond obligations.
Hodge also said although class numbers would likely increase and the number of sections decrease, the changes wouldn’t be significant.
For instance, language classes that are currently 20 to 21 students would only increase by one or two more students.
Hodge said in an interview that at some point, university employees will face layoffs.
“We’ll shrink the number with vacancies (that won’t be filled to save money),” Hodge said.
Hodge said that even though the cut is “substantial,” the action is needed to accommodate a variety of economic pressures.
“The vast majority of colleges and universities have, like Miami, taken pre-emptive actions to deal with significant budget shortfalls brought about by sharp drops in investment income, large shortfalls in state budgets and increased economic stress for the families of students,” the letter reads.
In an interview, Hodge said the individuals making financial decisions are keeping the university’s strategic goals in mind.
“The easiest thing would be across the board cuts,” he said.
Each division has been asked to develop a preliminary plan to meet these target cuts by the middle of January 2009. These cuts include reconsidering activities that can be reduced, reorganized or eliminated.
Miami has felt the strains of a shrinking budget for at least a year.
Budget guidelines for FY 2009 include no increases or enhancements in personnel budgets and benefit programs, as well as a call that vacant positions remain vacant as long as possible.
In October, President David Hodge announced a hiring freeze to last through June 30, 2009. Additional cuts will delay capital projects such as the Bicentennial Student Center.
Hodge said the university is focusing on its most critical functions-including academic affairs.
“Above all, we must remain focused on student success, which is at the heart of our mission and is the key of our long-term viability,” Hodge’s letter reads.
To get input from the community, Hodge and associate vice president for communications Dionn Tron said they are likely to have forums about the university’s finances at some point in the future.
Currently, Ohio is also facing a potential $7 billion shortfall in its 2010-11 operating budget, according to a statement released Dec. 1 by the Governor’s office, with a $640 million shortfall projected for the remainder of the current fiscal year.
Hodge said university administrators might see a draft of the state budget in February, but nothing would be finalized until June 2009.
Hodge said university administrators were briefed on the state budget at a recent Inter-University Council meeting.
“We have never seen numbers like that in the state and its just scary,” he said.
The last time Miami faced a serious budget crunch was in 1982-83. The university closed the McGuffey Laboratory School and eliminated some programs, such as home economics and industrial education. There were no layoffs at that time.
“The current situation is the most serious we have faced since the early 1980s, but it poses different challenges, due to the entire economic situation and the uncertainty that exists throughout the state and the nation,” she said, via e-mail.
However, Ohio and Miami aren’t the only ones suffering.
According to an article in The Washington Times Dec. 10, the president of the University of Maryland considered closing campus for a day to help the state deal with an estimated $200 million revenue shortfall for FY 2009.
In January and November, Governor Schwarzenegger proposed cutting $379.2 million from the California State University system, potentially reducing enrollment in the 10-campus system by 10,000 students next fall.
Schools from the University of Central Florida to Harvard University have also enacted hiring freezes, and larger classes are expected at the University of South Carolina as officials plan to cut $39 million from the school’s budget, an article in The State said Dec. 9.
Additional information regarding the university’s budget can be found online at www.muohio.edu/fiscal09.